LaSalle Investment Management raised $3 billion for its Asia Opportunity Fund III, invested $1 billion before the global financial crisis in 2008, then took an intermission before investing a further $1.4 billion.
The fund is now reaching the end of its four-year investment term, and rather than seek investor approval to extend that duration, has decided, (at a time when most fund managers would sell their spouses to vivisectionists to have excess capital to invest), to send the last $600 million back to investors.
“We could have pushed it out, but we’ve been cautious and judicious and on a risk-adjusted basis we think we’ve executed the best transactions for the fund,” says Ian Mackie, Asia-Pacific head of private equity for LaSalle Investment Management, who is based in Singapore.
“Our investors can decide what to do with the money. Maybe they’ll one day decide to invest it back with us, because as you can tell, our Asian Opportunity Funds are a series. However, we don’t have details about future funds that we can tell you about just yet.”
In the last year, the fund invested in Japanese commercial and residential real estate, having negotiated with local banks who had lent to stressed and distressed sellers. They then persuaded those banks to lend back to finance the projects under their new ownership.
They also invested in a residential/retail/office project in Chengdu, finding that they could step into the liquidity gap as lending on real estate was being reined in. That residential plot was purchased from Shui On Construction.
LaSalle also detected some reluctance among banks to lend on real estate projects in Australia. So they stepped into that gap, too.
In Australia, along with four residential developments, they bought the Sofitel Wentworth Hotel in Sydney and the Novotel on Collins in Melbourne, plus an office property on Elizabeth Street in Sydney and a 25% share in a Grade A Sydney office building on Castlereagh Street.
LaSalle did not invest funds during this recent period of activity in either Hong Kong or Singapore, given how quickly prices in both cities had rebounded after 2008.
LaSalle manages about $45 billion globally, of which some 20% is in Asia, and most of that money is within its series of Asia Opportunity Funds and Japanese Logistics Funds.